15 November 2011

There is one thing that the current batch of Republican candidates can agree on: foreign aid is bad. They offer different reasons why and how they will cut down the foreign aid budget, but all want to see it go or dramatically shift. Right now, the kinds of the policies is a sort of play-for-pay scheme where countries have to operate within a specific set of guidelines in order to access the money. In other words, the candidates want to use foreign aid to exert more direct control over allies and developing countries. It feels like we are back to fighting communists again!

The Economist does not take the issue lightly. In the most recent edition, M.S. rips apart the batch of foreign aid policies by the Republican candidates:

I understand why a presidential candidate would say something like this. It's because virtually no American voter has any idea what foreign aid is or how it works. They mostly think "foreign aid" is a kind of cash goody America gives away to countries that are friendly to us. And so it makes sense, from this perspective, to zero out the giveaways each year and only reward countries that have been sufficiently obsequious. In fact, this isn't what foreign aid is at all. Foreign aid is supposed to be dedicated to achieving various generous public-minded goals abroad. In, say, Uganda, we have a lot of foreign-aid programmes aimed at reducing the prevalence of HIV/AIDS. In, say, Afghanistan, we have a lot of foreign-aid programmes aimed at improving agricultural yields and streamlining value chains so poor farmers get more of the revenues of their produce. In, say, Cambodia, we have foreign-aid programmes aimed at promoting democratic political values. Like any public-health programme, agricultural-extension programme, or educational programme, these programmes are incapable of accomplishing anything on single-year timelines. One common timeline would be a year to design the programme and get relationships with local partners and governments functioning, another year of running it as a pilot programme while it gets up to speed, and a third year of evaluation to see whether it's really working and should be implemented on a long-term basis. At that point you could zero it out if it doesn't work, or scale it up if it does. If you start out with a one-year budget, though, you'll never get that far. Nobody who's interested in achieving real results will be interested in working with you during that first year, once they realise you don't actually have the budget to see your idea through.

This, in fact, is what's been happening over the past decade-plus, as shorter and shorter periods of review have made American foreign aid increasingly unreliable and impossible to work with. George Packer has a very good article in the current issue of Foreign Affairs on (among other things) the insular, process-obsessed fecklessness of America's efforts to rebuild Iraq. This kind of unworldly, amateurish attitude towards foreign aid is one of the reasons we've struggled there. There are plenty of valid criticisms of American development aid strategies; as one of its severest critics, William Easterly, writes in "White Man's Burden", development aid tends to be overly focused on centralised planning and too responsive to the demands of the donors and experts who fund and design the programmes, rather than the poor people it's supposed to be helping. You will search Mr Easterly's work in vain for a reference to zero-based budgeting. If anything, having to come back to Washington every year to re-convince your donors that your programme is worthwhile greatly exacerbates the problem of donor-driven funding, as your highly-trained development workers spend even more time and paperwork cultivating their patrons rather than trying to help their beneficiaries.

M.S. hits the nail on the head when it comes to some of the current problems faced by USAID and how the suggestion to shorten the timelines for programs can cause even more problems. If anything, the money needs to be freed up so that organizations can flex a little muscle and innovate. It takes more than a few years to know if some programs are working. Creating a shorter timeline will set up incentives to focus on short-term programs and to produce results that will continue to bring about more funds. In short, the donor will be in the driver's seat with the grant recipient tied up in the trunk while dragging the beneficiaries by a rope as they try to keep pace with the moving car. It would be an absolute disaster.

Sadly, these views do have traction. If the didn't they candidates would be run out of town. This means that now, more than ever, the humanitarian industry has to step up its communications and education efforts. The same narrative that has been used before is not working. Lowering the bar through shock tactics does not do much help either.

Many do not understand the value of the foreign aid budget (heck, they think it accounts for 10% of the total budget!). Now is a good time to make the change.